TL;DR: Employers can lower pharmacy spend without making care harder. The most effective approach is simple: make clinically appropriate generics and biosimilars easier to choose, easier to trust, and easier to find at the right moment.
Key Takeaways
- Zero or low copays for preferred generics and biosimilars can shift behavior because employees see the savings right away.
- Education matters because many people worry that a lower price means lower quality.
- Benefits apps and member Decision Support help employees compare options before a prescription is filled.
- Current 2024 to 2025 evidence shows generics and biosimilars account for about 90% of U.S. prescriptions while making up a much smaller share of Total Drug Spend.
- Strong pharmacy strategy supports both budget goals and employee well-being, which creates better long-Term ROR (Return on Relationship).
Pharmacy trend keeps climbing, and leadership teams feel it fast. Finance sees higher spend, HR handles the questions, and the C-suite wants a plan that protects both the budget and the employee experience.
A smart response starts with clarity. Employees do not need more noise. They need a benefits design that points them toward affordable, clinically appropriate options without surprises.
Make the lower-cost choice the easiest choice #
Plan Design shapes behavior. If a generic costs $0 and the brand costs much more, most employees will notice. If a biosimilar sits on a preferred tier with a clear price edge, adoption gets easier.
That matters because cost sharing changes decisions at the point of care. Lower out-of-pocket costs can also improve Adherence for maintenance medications. People are more likely to stay on treatment when they can afford the refill.
For employers, this is one of the cleanest ways to reduce avoidable pharmacy spend. Generics often cost far less than brand drugs. Biosimilars also create room for savings because they are commonly priced below the reference biologic.
Use Copay tiers that clearly reward generics and biosimilars #
A simple design often works better than a complex one. This kind of tier structure makes the price signal easy to understand:
| Medication tier | Typical member cost | Purpose |
|---|---|---|
| Preferred generics and preferred biosimilars | $0 to low Copay | Make the best-value option easy to choose |
| Preferred brands | Moderate Copay | Cover needed brands when lower-cost options are not right |
| Non-preferred brands | Higher Copay or Coinsurance | Discourage higher-cost choices when good alternatives exist |
The takeaway is straightforward. Employees should see a fair, visible reward for choosing the lower-cost option.
Still, a strong plan leaves room for medical need. If a member cannot use the preferred drug, exceptions should be clear and fast. A rigid plan can save dollars on paper while creating frustration, delays, and abandonment.
Remove friction at the pharmacy counter #
Copay design does not work on its own. Operational details matter because confusion at the counter can erase trust.
Start with clear Formulary placement. Then support the program with 90-day fills for maintenance drugs, home delivery when it fits the drug and the member, and transition rules that prevent surprise denials after a Formulary change.
Complicated rules weaken engagement. Employees lose confidence when they hear one message during Open Enrollment and face a different one at refill time.
That is also why PBM contract terms and compliance updates deserve attention. Recent policy changes, including drug cost caps and PBM disclosures under OBBBA, show how much pharmacy transparency now matters in benefit strategy.
Lower copays work best when employees trust the medication and understand the switch.
Help employees trust generics and biosimilars #
Most employees do not push back on lower-cost drugs because they want to spend more. They hesitate because they worry the cheaper option may be weaker, less safe, or unfamiliar.
That concern is real, and it deserves a clear answer. According to the FDA, approved generic drugs must match the brand in the ways that matter for treatment. They have the same active ingredient, strength, dosage form, route of use, and expected clinical effect. The pill may look different, but the medicine works the same way.
Biosimilars can feel less familiar, so plain language matters even more. These medicines are approved only after meeting high standards for safety and effectiveness. They are highly similar to the reference biologic, with no meaningful clinical difference in how they work for patients.
Answer the questions employees already have #
Good education starts with the questions people already ask. HR teams should not bury those answers in a long PDF.
Use short FAQs, one-minute videos, enrollment guides, and manager talking points that cover topics such as:
- Do generics work the same as brand drugs?
- Why is the generic price lower?
- What is a biosimilar?
- Will my doctor or pharmacist help if a switch makes sense?
- What happens if I need the brand for medical reasons?
Keep the tone calm and direct. Employees need knowledge, not sales copy.
Connect the message to real-life savings and peace of mind #
Education works best when it ties the Plan Design to daily life. Lower out-of-pocket costs mean fewer hard choices at the pharmacy counter. Better understanding means fewer surprise calls to HR. Confidence in the medication means better follow-through.
The broader savings story supports that message. Current 2024 data shows generics and biosimilars filled about 90% of U.S. prescriptions, yet they accounted for only about 12% of drug spending. They also generated hundreds of billions in system-wide savings, including more than $20 billion from biosimilars alone in 2024.
That context is useful for leadership and for employees. It shows why lower-cost options matter without turning the message into a budget exercise.
It also matters in specialty classes, where spend can rise fast. Employers tracking specialty drugs driving health costs often find that biosimilar strategy deserves extra attention because a small number of claims can move the plan trend.
Use benefits apps and Decision Support to guide better choices in the moment #
Communication helps, but timing matters more. Employees often choose a drug while searching a benefits app, talking with a Provider, or trying to refill a prescription. That is the moment when guidance has the most value.
Decision Support can reduce avoidable spend because it shows the member what the lower-cost option is before they pay for the higher-cost one. Employers using cost transparency, Formulary guidance, Step Therapy, and prior authorization rules often see stronger use of preferred medications.
Show lower-cost alternatives before a prescription is filled #
The best member tools make savings visible early. Useful features include real-time price checks, generic and biosimilar alternatives, pharmacy comparisons, prior authorization alerts, and prompts that encourage a conversation with the doctor.
This is less about pushing a product and more about reducing confusion. If a member can see that the generic is covered at $0 and the brand costs much more, the plan has done part of the work already.
The same goes for biosimilars. When the app shows a preferred biosimilar, the member and Provider can discuss the option before the claim hits the plan at a much higher cost.
Turn pharmacy data into ongoing action #
Pharmacy strategy improves when leaders track the right metrics. A quarterly review should include generic dispensing rate, biosimilar uptake, Specialty Drug trend, prescription abandonment, and member cost burden.
That level of insight helps employers adjust Plan Design, communication, and vendor terms over time. JA’s actuarial services for benefits analytics support this kind of review by turning raw claims data into practical decisions.
Benchmarking also matters because a number means more when you can compare it against peers. The Insight(R) benefits benchmark survey gives employers a clearer view of plan performance across industries, sizes, and regions, including prescription plan trends.
Build a pharmacy strategy that lowers cost and supports employees #
The strongest pharmacy strategies are shared across teams. HR needs clear communication. Finance needs cost control and forecast confidence. Executive leadership needs measurable outcomes that hold up over time. Your PBM, advisors, and communication team all need the same playbook.
A good strategy also keeps the human side in view. Every pharmacy claim touches a person, a family, and often a stressful moment. Cost control matters, but so does confidence in care.
Start with a simple rollout plan #
A practical rollout can move in this order:
- Review the current drug mix and identify high-opportunity classes for generic or biosimilar use.
- Redesign copays so preferred lower-cost drugs have a clear member advantage.
- Align Formulary rules, prior authorization criteria, and exception processes.
- Launch employee education in plain language before the change takes effect.
- Use Decision Support in benefits apps and member portals.
- Measure outcomes each quarter and adjust.
This sequence keeps the work focused. It also reduces the risk of launching a benefit change without the communication and data support needed to make it stick.
Measure success with outcomes leaders care about #
Leadership teams need a scorecard they can trust. Focus on a few measures that connect budget impact with employee experience:
- Generic dispensing rate
- Biosimilar conversion rate
- Employee out-of-pocket savings
- Pharmacy trend
- Medication Adherence
- Avoidable specialty spend
These metrics help tell the full story. Finance can see spend movement. HR can see whether the experience is becoming clearer. The C-suite can judge whether the strategy is producing measurable outcomes with lasting value.
When employers make generics and biosimilars affordable, easy to find, and easy to trust, employees are far more likely to choose them.
That is how pharmacy strategy should work. It should reduce waste, protect care, and give people a clearer benefits experience.
A partner like JA can help turn pharmacy data into action that supports both the budget and the people behind it.
